Bloom Energy unveils 'power plant in a box'

ENERGY

Bloom Energy Servers (bottom) in use at eBay offices are seen on Wednesday February 24, 2010 in San Jose, Calif.

Bloom Energy Servers (bottom) in use at eBay offices are seen on Wednesday February 24, 2010 in San Jose, Calif.

Photo: Lea Suzuki, The Chronicle

Photo: Lea Suzuki, The Chronicle

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Bloom Energy Servers (bottom) in use at eBay offices are seen on Wednesday February 24, 2010 in San Jose, Calif.

Bloom Energy Servers (bottom) in use at eBay offices are seen on Wednesday February 24, 2010 in San Jose, Calif.

Photo: Lea Suzuki, The Chronicle

Bloom Energy unveils 'power plant in a box'

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Bloom Energy Corp., one of Silicon Valley's most secretive startups, unveiled on Wednesday its long-awaited "power plant in a box," a collection of fuel cells that the company says can provide clean electricity to homes, office buildings - even whole villages in the developing world.

The Bloom Energy Server, a smooth metal box the size of a pickup truck, can generate electricity from multiple fuels while producing relatively few greenhouse gas emissions. With government subsidies factored in, power from the server costs less than power from the grid.

Unlike other fuel cells, Bloom's is made mostly of sand, with no platinum or other precious metals thrown in as catalysts. And unlike solar panels and wind turbines, each server can produce the same amount of energy day and night for years on end, according to the company. The process is twice as efficient as burning natural gas.

"This is not when the sun shines, this is not when the wind blows - this is base load, nonstop," said K.R. Sridhar, Bloom's co-founder and chief executive officer. The server, he said, could change the energy industry in much the same way that cell phones changed communications, decentralizing the generation of power.

An eager crowd

Sridhar introduced the device, for years a subject of intense speculation within the green-tech industry, before a large and rapturous crowd of politicians, press and Silicon Valley luminaries, eager to see the first product from a company that has landed roughly $400 million in venture capital investments. Gov. Arnold Schwarzenegger hailed the server as a potential revolution. Sen. Dianne Feinstein sent the company, founded in 2001, congratulations via a video message.

More important, some of the business executives in attendance had already bought the servers, which cost $700,000 to $800,000 apiece. Bloom, based in Sunnyvale, counts among its customers the Coca-Cola Co., Cox Enterprises, FedEx Corp. and Google Inc., all of whom sent executives to speak at Wednesday's public premiere. Online marketplace eBay Inc. liked the product enough that it hosted the event at its San Jose campus, where five servers have been running since July.

"Like everyone says, it sounded too good to be true," said Cox Chairman Jim Kennedy. "So we sent some people to check it out, and they said, 'It could be true.' "

The communications company installed four of the servers, each generating 100 kilowatts of electricity, at its KTVU television station in Oakland. "Our general manager is here, and he's smiling, so that must mean it's working," Kennedy said.

Whether it works long-term will be the key question, energy experts say.

The Bloom Energy Server uses solid oxide fuel cells, generating power through an electrochemical reaction between oxygen and such fuels as natural gas, ethanol and landfill gas. Solid oxide fuel cells are more efficient and operate at higher temperatures than proton exchange membrane fuel cells, which have been commercially available for years. But making a solid oxide fuel cell that lasts has proved tricky. Researchers have been trying for decades.

"The thing we don't know yet is, how is this thing going to perform over time?" said Daniel Kammen, a professor in the Energy and Resources Group at UC Berkeley. He noted the Bloom server's daunting cost.

"The question is, is it going to last long enough to pay that back?" Kammen said. "That has been the problem with fuel cells the whole time."

No silver bullet

Indeed, other types of fuel cells have been touted as the future of energy, only to remain niche products.

"I've been looking at fuel cells since the early '90s, and even back then, people were telling me fuel cells were right around the corner," said David Friedman, research director for the vehicles program at the Union of Concerned Scientists. "These are not silver bullets. These are not Harry Potter's magic wand."

Sridhar said the servers can provide electricity at 9 to 10 cents per kilowatt hour, compared with 14 cents for power from the grid. With those savings, most customers will make their money back in three to five years, he said.

Government subsidies

Sridhar's price estimate includes financial incentives from the federal and California governments, which together can cover half the server's cost. He defended those subsidies Wednesday as necessary to help innovative technologies grow and said the server's prices will fall as the company scales up.

"It's a new technology - we need that subsidy in the early days," he said. "Very quickly, we need to move off of subsidies."

The server represents the latest form of "distributed generation" - creating electricity at the local level rather than at distant power plants. Different versions of the server could power individual houses or business campuses, taking stress off the country's aging electrical grid and reducing the need for new transmission lines.

Eventually, Bloom's backers want to create a version of the server that can power villages in the developing world, places that don't have access to electricity. The goal, they say, is to create an energy source that can help millions of people climb out of poverty without significantly adding to global warming.

"We want to move this product forward to the point where we can put it in an African village ... and they can have power, they can have light," said former Secretary of State Colin Powell, who sits on Bloom's board of directors. "Think of the potential."